Former investment banks seek depositors' funds.

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Yesterday, the last bastions of Wall Street independence announced plans to transform into more traditional banks, subjecting themselves to deeper regulatory scrutiny and tighter limits on leverage. The move also allowed them to pursue customer deposits, a more stable funding source than the recently chaotic money markets.

This morning, Bloomberg reported the 2 firms are already on the prowl, combing the banking landscape for deposits they can snatch up on the cheap. This may seem odd, since Goldman and Morgan were fighting for their lives just a few short days ago - and Morgan was desperately searching for an infusion of capital. Potential investors may be comforted by new borrowing limits for the formerly leverage-dependent institutions. In addition, financing operations with customer deposits rather than through money markets will decrease the risk of a liquidity squeeze.

Rather than targeting entire banking institutions, Goldman is more interested in buying deposits on the wholesale market or from collapsed institutions like IndyMac, which is currently being liquidated by the FDIC. Morgan plans to expand offerings like certificates of deposit to its more than 3 million retail brokerage clients.

Goldman and Morgan, however, have a more daunting challenge ahead than simply finding cheap deposits to shore up liquidity: Trust.

The events of the past 15 months, specifically the dramatic government intervention into the free markets, has created a systemic shift in the way the public views Wall Street.

Main Street instinctively knows it shouldn't trust the alchemists of lower Manhattan; we should have learned our lesson after the dot-com crash. But Wall Street simply dreamed up a better disguise, hiding their structured mortgage bets behind the government-constructed façade of affordable housing for all.

Now, the very firms largely responsible for the crisis must go to the public, hat in hand, and ask that they turn their checking and savings accounts over to them.

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